Item 1.01. Entry into a Material Definitive Agreement.
Term Loan Credit Agreement and Revolving Credit Agreement
On July 25, 2017, Sientra Inc., a Delaware corporation (Sientra or Parent) and Desert Acquisition Corporation, a
Delaware corporation and wholly-owned subsidiary of Parent (Purchaser, and, prior to giving effect to the Merger (as defined below), together with Sientra, the Borrowers), Miramar Labs, Inc., a Delaware corporation
(Miramar), and Miramar Technologies, Inc., a Delaware corporation and wholly-owned subsidiary of Miramar (Miramar Technologies and, after giving effect to the Merger (as defined below), together with Parent, and Miramar, the
Borrowers), borrowed $25.0 million aggregate principal amount of term loans (the Closing Date Term Loans) pursuant to a Credit and Security Agreement (Term Loan), dated as of July 25, 2017 by and among the
Borrowers, the lenders party thereto from time to time and MidCap Financial Trust, as administrative agent and collateral agent (Agent) (the Term Loan Credit Agreement). The Borrowers used the proceeds of the Closing Date
Term Loans (i) to repay in full Parents existing indebtedness under its Loan and Security Agreement with Silicon Valley Bank, which totaled approximately $5.0 million, (ii) to pay fees and expenses in connection with the
foregoing and (iii) for general corporate purposes. The Credit Agreement provides for (i) the Closing Date Term Loans, (ii) until March 31, 2018, an additional $10.0 million term loan facility subject to the satisfaction of
certain conditions, including FDA certification of the manufacturing facility operated by Vesta and (iii) an additional $5.0 million term loan facility subject to the satisfaction of certain conditions, including evidence that
Parents Net Revenue (as defined in the Term Loan Credit Agreement) for the past 12 months was greater than or equal to $75.0 million (collectively, the Term Loans).
On July 25, 2017, Parent entered in to a Credit and Security Agreement (Revolving Loan), by and among the Borrowers, the lenders party
thereto from time to time, and the Agent (the Revolving Credit Agreement and, together with the Term Loan Credit Agreement, the Credit Agreements). The amount of loans available to be drawn under the Revolving Credit
Agreement is based on a borrowing base equal to 85% of eligible accounts, subject to certain adjustments. The Borrowers may make (subject to the applicable borrowing base at the time) and repay borrowings from time to time under the Revolving Credit
Agreement until the maturity of the facility on December 1, 2021.
The obligations under each Credit Agreement are guaranteed by
Parent and each of Parents existing and subsequently acquired or formed direct and indirect subsidiaries (other than certain immaterial subsidiaries and subsidiaries whose guarantee is prohibited by applicable law). The obligations under the
Credit Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all tangible and intangible assets of the Borrowers and the guarantors, except for certain customary
excluded property, and (ii) all of the capital stock owned by the Borrowers and guarantors thereunder (limited, in the case of the stock of certain
non-U.S.
subsidiaries of the Borrowers, to 65% of the
capital stock of such subsidiaries). The Borrowers and the guarantors under the Credit Agreements are individually and collectively referred to herein as a Credit Party and the Credit Parties, as applicable.
The Term Loans are subject to a commitment fee of 0.5% of the amount of the lenders commitments to make term loans. The Term Loans may
be prepaid in full or in part through July 25, 2018 with payment of a 3.5% prepayment premium, after which they may be prepaid in full or in part through July 25, 2019 with payment of a 2.5% prepayment premium, after which they may be
prepaid in full or in part through July 15, 2020 with payment of a 1.5% prepayment premium, after which they may be prepaid in full or in part with no prepayment premium. An additional 5.0% of the amount of Terms Loans advanced by the lenders
will be due upon prepayment or repayment of the Term Loans in full.
The interest rate applicable to the Term Loans is LIBOR plus 7.50%,
and the interest rate applicable to loans incurred under the Revolving Credit Agreement is LIBOR plus 4.50%, in both cases subject to a LIBOR floor of 1.0%.
Each Credit Agreement requires that the Borrowers (i) maintain Net Revenue (as defined in each Credit Agreement) in amounts set forth in
each Credit Agreement and (ii) at all times, maintain cash and cash equivalents of at least $10.0 million. The Credit Agreements also contain customary representations and warranties and customary affirmative and negative covenants,
including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions.
Events of default under each Credit Agreement include: (i) failure by any Borrower to timely make payments due under each Credit
Agreement; (ii) material misrepresentations or misstatements in any representation or warranty by any Credit Party when made; (iii) failure by the Parent or its subsidiaries to comply with the covenants under each Credit Agreement and
other related agreements; (iv) certain defaults under a specified amount of other indebtedness of Parent or its subsidiaries; (v) insolvency or bankruptcy-related events with respect to Parent or any of its subsidiaries; (vi) certain
undischarged judgments against Parent or its subsidiaries; (vii) certain ERISA-related events with respect to Parent or its subsidiaries above a specified amount; (viii) certain
security interests or liens under the loan documents ceasing to be, or being asserted by any Credit Party not to be, in full force and effect; (ix) the institution of criminal proceedings against any Credit Party; (x) an event of default
under the guarantee of the obligations under each Credit Agreement; (xi) the prepayment of any subordinated debt other than as specifically permitted by the terms of such subordination; (xi) the failure to maintain registration with
respect to any Borrower whose equity is registered with the SEC; (xii) the occurrence of a Material Adverse Effect (as defined in each Credit Agreement); (xiii) certain adverse actions by the FDA, DEA or CMS with respect to certain products or
which could be reasonably expected to result in a Material Adverse Effect (as defined in each Credit Agreement); (xiv) a default or material breach under certain specified material contracts and (xv) any loan document ceasing to be, or any
challenge or assertion by any Credit Party that such loan document is not, in full force and effect. If one or more events of default occurs and continues beyond any applicable cure period, the Agent may, with the consent of the lenders holding a
majority of the loans and commitments under the facilities, or will, at the request of such lenders, terminate the commitments of the lenders to make further loans and declare all of the obligations of the Credit Parties under each Credit Agreement
to be immediately due and payable.
The foregoing description of the Term Loan Credit Agreement and the Revolving Credit Agreement is not
intended to be complete and is qualified in its entirety by reference to each Credit Agreement, copies of which will be filed as Exhibits to Parents next quarterly report on Form
10-Q.